Perimeter Medical Imaging AI’s (PYNKF) CEO Jeremy Sobotta on Q1 Results – Earnings Call Transcript. Perimeter Medical Imaging AI, Inc. (OTCPK:PYNKF) Q1 2022 Results Conference Call May 06, 2022 4:30 PM ETCompany ParticipantsMark Komonoski – Integrous Communications, Investor RelationsJeremy Sobotta -…
Perimeter Medical Imaging AI Announces First Quarter Financial Results for the Period Ended March 31, 2022 TORONTO and SAN JOSE, Calif., May 06, 2021 (GLOBE NEWSWIRE) — Perimeter Medical Imaging AI, Inc. (TSX: PINK; OTCQB: PYNKF) (“Perimeter” or the “Company”), a medical device company developing artificial intelligence (“AI”)-powered tools to improve diagnostic accuracy and streamline workflow in pathology imaging, today announced its first quarter financial results for the period ended March 31, 2021. All dollar amounts are presented in U.S. dollars unless otherwise indicated. First Quarter Financial Results Revenue for the three months ended March 31, 2021 was $0.2 million, compared with $0.1 million in 2020, an increase of $0.1 million, or 100%. The increase was primarily due to higher sales in the United States. Cost of goods sold for the three months ended March 31, 2021 was $0.6 million (31.1% of revenue), compared with $0.4 million (41.3% of revenue) for the same period in 2020. The decrease was primarily due to improved gross margin, as well as favorable currency effects. Gross profit for the three months ended March 31, 2021 was negative $0.4 million, compared with negative $0.3 million for the same period in 2020. Operating expenses for the three months ended March 31, 2021 were $5.3 million, compared with $5.2 million for the same period in 2020, an increase of $0.1 million, or 2.0%. The increase was primarily due to higher research and development expense, offset by favorable foreign exchange effects. Net loss for the three months ended March 31, 2021 was $5.7 million, compared with a net loss of $5.5 million for the same period in 2020, an increase of $0.2 million. Net loss per share for the three months ended March 31, 2021 was $0.04, based on 133.9 million weighted average basic and diluted shares outstanding, compared with a net loss per share of $0.04 for the same period in 2020. As at March 31, 2021, cash, cash equivalents and short-term investments totaled $19.8 million, compared with $26.9 million as at December 31, 2020. Subsequent Events On April 19, 2021, the Company completed an initial public offering of common shares on the Toronto Stock Exchange. In connection with the completion of the offering, the Company issued 6,000,000 common shares at a price of CAD$2.00 per common share and gross proceeds of CAD$12 million. On May 5, 2021, the Company received gross proceeds of CAD$8.0 million from the exercise of approximately 4,000,000 warrants by a strategic investor and gross proceeds of CAD$10.0 million from the exercise of approximately 5,000,000 warrants in connection with the initial public offering. First Quarter Business Highlights and Recent Developments On February 22, 2021, the Company closed its merger with Canadian-based OTIS Medtech Inc. Pursuant to the terms of the Arrangement Agreement (the “Merger Agreement”), each common share of OTIS was exchanged for 0.55 of a common share of the Company and each common share of the Company was exchanged for one common share of the Company. As a result of the merger, the Company changed its name to “Perimeter Medical Imaging AI, Inc.” On March 18, 2021, the Company announced that it had been selected as an exclusive partner by the University of Texas MD Anderson Cancer Center under a new strategic partnership agreement to commercialize intellectual property related to breast cancer diagnostics. On March 23, 2021, the Company announced that it had acquired SurgVision, Inc.’s portfolio of intellectual property related to surgical visualization. The Company believes that the addition of this technology will help accelerate the development of its MRI Surgical Assist System. On April 27, 2021, the Company announced the publication of a scientific paper describing the use of the Company’s Optea™ Tx breast tissue characterization software in a feasibility study conducted with the Company’s Optima™ Tx handheld scanner. The study, published in the May 2021 edition of the peer-reviewed journal, Modern Pathology, found that application of the Company’s Optea™ Tx software may improve breast cancer diagnosis. On April 28, 2021, the Company announced that it had entered into a strategic investment and supply agreement with a leading global medical device company. Under the terms of the agreement, the Company will receive up to $22 million through a combination of equity investment, product purchase orders, and technology access fees. On May 6, 2021, the Company announced that it had been added to the Nasdaq Biotechnology Index (NBI), which is designed to track the performance of a set of securities listed on The Nasdaq Stock Market® (NASDAQ®) that are classified according to the Industry Classification Benchmark (ICB). The Company is scheduled to participate in the following upcoming investor conferences: BMO 30th Annual Healthcare Conference, February 8-11, 2021; Canaccord Genuity 39th Annual Growth Conference, August 10-12, 2021; H.C. Wainwright 22nd Annual Global Investment Conference, September 20-22, 2021; and The Sidoti & Company Summer Investor Conference, September 21-23, 2021. About Perimeter Medical Imaging AI Perimeter Medical Imaging AI, Inc. (TSX: PINK; OTCQB: PYNKF) is a medical device company dedicated to improving diagnostic accuracy and streamlining workflow in pathology imaging. The Company is focused on the development and commercialization of artificial intelligence (“AI”)-powered tools for use in pathology imaging. The Company believes that its AI-powered tools will enhance diagnostic confidence, shorten turnaround times and increase productivity for pathologists. The Company sells its products across the United States through a direct sales force. Perimeter Medical Imaging AI, Inc. is headquartered in Toronto, Ontario, Canada, with offices in San Jose, California, USA. For more information, please visit www.perimetermedical.com. Forward-looking Statements Certain statements made herein, including without limitation those relating to the Company’s proposed product plans, anticipated product effectiveness, potential clinical benefits and the anticipated timing of commercialization and regulatory approvals, may constitute “forward-looking information” within the meaning of applicable Canadian securities laws. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Forward-looking information in this press release include, but are not limited to, the Company’s ability to develop and commercialize new products, the Company’s ability to obtain regulatory approvals, the Company’s ability to successfully execute on commercialization plans and the Company’s ability to generate sales and increased shareholder value. Examples of such statements include statements regarding the Company’s success in developing its Optima™ Tx handheld scanner and Optea™ Tx software, the Company’s success in developing its MRI Surgical Assist System, the Company’s belief that its Optima™ Tx handheld scanner, Optea™ Tx software and MRI Surgical Assist System will enhance diagnostic confidence, shorten turnaround times and increase productivity for pathologists, the Company’s plans to expand its commercial operations, the Company’s plans to achieve profitability and the Company’s plans to continue to develop new technologies. Risks and uncertainties that may cause the actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information in this press release include, but are not limited to, the risk that the Company may not successfully develop its Optima™ Tx handheld scanner, the risk that the Company may not successfully develop its Optea™ Tx software, the risk that the Company may not successfully develop its MRI Surgical Assist System and other products, the risk that the Company may not be able to obtain regulatory approval of its products, the risk that the Company may not be able to gain adoption of its products in the marketplace, the risk that the Company may not achieve or sustain profitability and the risk that the Company may not be able to raise additional funds necessary to support its business activities. Additional risks and uncertainties about the Company are described in its continuous disclosure filings with Canadian securities regulatory authorities and are available on SEDAR at www.sedar.com. These risks and uncertainties are based on certain assumptions, including assumptions about the Company’s ability to execute on its strategic plans. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. readers are cautioned not to place undue reliance on forward-looking information. Except as required by applicable securities laws, we do not undertake to update any forward-looking information, whether written or oral, that may be made from time to time or to disclose publicly any material change in expectations or other changes in events, conditions or circumstances on which any such statement is based. Non-GAAP Measures The Company uses certain non-GAAP measures in presenting its financial results. These non-GAAP measures are not recognized measures under International Financial Reporting Standards and therefore do not have a standardized meaning prescribed by IFRS. Therefore, these measures may not be comparable to similar measures presented by other companies. The Company believes that these non-GAAP measures provide meaningful supplemental information regarding its operational results and facilitate comparisons to its operating results between periods and to those of its competitors. These measures include non-GAAP gross profit, non-GAAP net loss and non-GAAP net loss per share. Each of these non-GAAP measures is defined below and is reconciled to the nearest GAAP measure under the heading “Reconciliation of GAAP to Non-GAAP Financial Measures.” Non-GAAP gross profit is defined as total revenue less cost of goods sold. Non-GAAP net loss is defined as net loss adjusted for amortization of intangible assets, share-based compensation, one-time advisory fees, loss on settlement of convertible debentures and loss on settlement of promissory note, as well as other adjustments to net income for the period. Non-GAAP net loss per share is defined as non-GAAP net loss divided by weighted average basic and diluted shares outstanding. The Company has included the foregoing non-GAAP financial measures because it uses such information internally for its operating, budgeting and financial planning purposes. These non-GAAP measures are used by management to facilitate comparisons of the Company’s operating results on a consistent basis from period to period, as well as to compare the Company’s results to its competitors’ operating results. The Company also believes that the securities analysts and investors who follow the Company use these non-GAAP measures to evaluate the Company’s daily business activities and analyze its performance on a comparative basis from period to period. The Company believes that these non-GAAP measures are useful in evaluating the Company’s current financial performance and also facilitates period-to-period comparisons and analysis of the underlying trends in the Company’s business. For more information, see “Reconciliation of GAAP to Non-GAAP Financial Measures” below. Perimeter Medical Imaging AI, Inc. (a development stage company) Consolidated Balance Sheets (Unaudited) (Dollars in U.S. Dollars) As at March 31,
2021 December 31,
2020 Assets Cash and cash equivalents $ 4,829,343 $ 1,379,049 Short-term investments 14,965,746 25,511,491 Restricted cash 17,651 17,651 Accounts receivable 1,200,878 1,095,522 Inventory 2,299,527 2,362,964 Prepaid expenses and other current assets 606,843 763,281 Total current assets 24,729,036 31,119,898 Property and equipment, net 1,702,959 1,851,686 Intangible assets, net 9,650,545 10,698,069 Goodwill 11,704,687 12,021,161 Other assets 302,291 299,743 Total assets $ 47,989,509 $ 55,990,767 Liabilities and Shareholders’ Equity Accounts payable and accrued liabilities $ 3,734,348 $ 4,189,173 Convertible debentures 8,000,000 8,000,000 Note payable – related party – 200,000 Warranty provisions 682,337 450,339 Other long-term liabilities 114,056 117,923 Total liabilities 12,530,741 12,957,435 Shareholders’ equity Common stock 133,915 133,915 Additional paid-in capital 58,063,006 57,493,045 Accumulated deficit (33,818,959 ) (28,782,926 ) Accumulated other comprehensive loss (433,719 ) (175,508 ) Total shareholders’ equity 35,458,768 43,033,526 Total liabilities and shareholders’ equity $ 47,989,509 $ 55,990,767 Perimeter Medical Imaging AI, Inc. (a development stage company) Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Dollars in U.S. Dollars, except share and per share data) Three months ended
March 31, 2021 2020 Revenue $ 200,371 $ 102,836 Cost of goods sold 631,774 418,494 Gross (loss) profit (431,403 ) (315,658 ) Operating expenses Research and development 4,928,784 4,146,256 Selling and marketing 1,374,813 957,208 General and administrative 5,399,852 4,908,425 Total operating expenses 11,703,449 9,012,889 Loss from operations (12,134,852 ) (9,328,547 ) Other income (expenses) Interest expense, net (279,286 ) (364,382 ) Amortization of deferred financing costs (2,387 ) (5,863 ) Foreign exchange gains (losses) (104,758 ) (1,997 ) Other income (expense) (1,942 ) (1,692 ) Loss on settlement of convertible debentures – (4,000,000 ) Loss on settlement of promissory note – (1,000,000 ) Total other income (expenses) (389,273 ) (5,372,034 ) Net loss $ (12,524,125 ) $ (14,700,581 ) Other comprehensive loss: Foreign currency translation adjustment (258,211 ) (1,577,527 ) Comprehensive loss $ (12,782,336 ) $ (16,278,108 ) Basic and diluted net loss per share $ (0.04 ) $ (0.11 ) Weighted average number of common shares outstanding Used in computing net loss per share, basic and diluted 133,848,384 133,530,766 Perimeter Medical Imaging AI, Inc. (a development stage company) Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (Dollars in U.S. Dollars) Three months ended March 31, 2021 2020 Net Loss GAAP $ (12,524,125 ) $ (14,700,581 ) Adjustments to net income: Amortization of intangible assets 947,524 1,215,000 Share-based compensation 1,105,587 907,956 One-time advisory fees – 1,500,000 Loss on settlement of convertible debentures – 4,000,000 Loss on settlement of promissory note – 1,000,000 Total adjustments 2,053,111 8,622,956 Non-GAAP net loss $ (10,470,014 ) $ (6,077,625 ) Net Loss per Share GAAP $ (0.04 ) $ (0.11 ) Adjustments to net income: Amortization of intangible assets 0.01 0.01 Share-based compensation 0.01 0.01 One-time advisory fees – 0.01 Loss on settlement of convertible debentures – 0.03 Loss on settlement of promissory note – 0.01 Total adjustments 0.02 0.07 Non-GAAP net loss per share $ (0.02 ) $ (0.04 ) Three months ended March 31,
2021 2020 Gross Profit GAAP $ (431,403 ) $ (315,658 ) Adjustments to gross profit: Amortization of intangible assets 947,524 1,215,000 Share-based compensation 1,105,587 907,956 Total adjustments 2,053,111 2,122,956 Non-GAAP gross profit $ 1,621,708 $ 1,807,298
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